Comment: British Airways has been punished. What about Virgin? – 02 Aug 2007

British Airways is on the receiving end of the highest fine ever imposed by the Office of Fair Trading for infringements of competition law.

BA has admitted that between August 2004 and January 2006 there was collusion by individuals with Virgin Atlantic over the surcharges that were added to ticket prices in response to rising oil prices.

What a shame BA is taking all the rap. By confessing all to the OFT, Virgin Atlantic neatly sidestepped all penalties, as it is covered by the OFT’s leniency policy.

So Virgin will neither pay the price, nor be apportioned blame. If the national newspaper reports are anything to go by, BA has emerged as the bad guy and Virgin is the goody-two-shoes for reporting it.

That some employees at Virgin and BA conferred on proposed changes to surcharges, rather than set levels independently as required under competition law principles, is nothing but bad business. During the period in question, surcharges rose from £5 to £60 a ticket.

BA chief executive Willie Walsh insists passengers were not overcharged, stating fuel surcharges were “a legitimate way of recovering costs”.

Speaking of costs, BAA is under attack again this week, with BA and Virgin in agreement over the operator’s monopoly control of London airports.

The two airlines are understood to have told the Competition Commission, which is investigating this monopoly, that individual terminal owners would improve service at Heathrow. They have accused BAA of putting profits ahead of investment in infrastructure.

The national press is lapping up the controversy, placing a negative spin on the travel industry as a whole. Still, looking at the state of the market, it takes more than this to put off the British travelling public.